Archive | Forestry

Forestry Minister Shane Jones said yesterday new legislation to bring forestry rights into the overseas investment screening regime would help promote high quality foreign investment that puts more emphasis on genuine benefits for New Zealanders.

The changes to the screening regime are included in the Overseas Investment Amendment Bill, which has been under the spotlight more for its impact on foreign residents’ & citizens’ ability to invest in New Zealand residential property.

Mr Jones said: “The bill recognises the importance of forestry to New Zealanders, and I’m confident it’s struck the right balance that will boost forestry investment while ensuring the regime cannot be bypassed.

“High quality overseas investment in forestry will be an important part of achieving the Government’s One Billion Trees planting programme and will also promote economic development opportunities in our regions.

“This Government wants to see a strong & flourishing forestry sector that will create & protect jobs across the country and contribute to our climate change targets.

“Following the select committee’s review & intensive consultation with stakeholders, some key changes have been made to the bill, including increasing investors’ flexibility in obtaining consent and removing unnecessary red tape.

“Investors can now choose from any of 3 different tests when seeking to acquire forestry land or rights. The bill also ensures that investors & landowners can make minor changes to their agreements without unnecessarily having to return to the Government to obtain consent.”

The Government will report to Parliament on the operation & effectiveness of these amendments 2 years after the new regime starts.

Primary Industries Minister Nathan Guy & Conservation Minister Maggie Barry said at the weekend the control of wilding pines had nearly reached the first-year target of 1 million ha.

Mr Guy said: “20% of New Zealand will be covered in unwanted wilding conifers within 20 years if their spread isn’t stopped. They already cover more than 1.8 million ha of New Zealand and until now have been spreading at about 5%/year. The national wilding conifer control programme was put in place in 2016 to prevent their spread and systematically remove them from much of the land already taken over.

“Prevention is the best form of management. Removing young seedlings before they start producing seeds costs less than $10/ha, but removing mature trees can cost over $10,000/hectare.”

Ms Barry said: “Wildings compete with native plants & animals for sunlight & water and can severely alter natural landscapes. The control programme is to protect our conservation land, iconic landscapes, tourist routes, high country farming heritage & sensitive water catchments from these invaders.

“Last year the Government committed an additional $16 million to wilding control over the next 4 years and that’s on top of $11 million already spent each year.”

Raukawa chairwoman Vanessa Eparaima, appointed to chair Kakano, said the investment was a major strategic & commercial step forward for iwi, and a win-win that ensured iwi were involved in the forestry business itself as well as being the landowner.

90% of the Kaingaroa Timberlands tree crop is on the 176,000ha returned by the Crown to 8 central North island iwi in 2008, in the largest single Treaty of Waitangi settlement for iwi. Kaingaroa Timberlands is New Zealand’s largest forestry operation, covering 190,000ha east of Lake Taupo & the Rotorua Lakes.

The deal, settled on 28 February, reduces the NZ Super Fund’s stake in the forest from 41.25% to 38.75%. The other shareholders are both North American – the Public Sector Pension Investment Board (30%), a Canadian Crown corporation investing funds for the pension plans of the Canadian public service, the Canadian Forces, the Royal Canadian Mounted Police & the Reserve Force; and an affiliate of the President & Fellows of Harvard College (28.75%).

Forest Enterprises Ltd (John Sexton & managing director Steve Wilton, Masterton) said on Friday it would expand its operations in the Wairarapa as it gears up for major growth in its harvesting programme.

Mr Wilton said the company had implemented a new management structure, with recent appointments of key new staff, and was investigating the feasibility of an innovative harvest co-operative to co-ordinate part of its operations.

The company manages 73 investment forests comprising 21,534ha for 6400 investors, and Mr Wilton said it had decided to take harvest operations in-house: “Until last year, Forest Enterprises’ day-to-day harvest management was subcontracted to third parties and the company’s role was to manage the overall process. This meant we were one step removed from the harvesting operation. This will no longer be the case.”

The company has 6 full-time logging crews operating in 7 investor forests and its log volume throughput is likely to exceed 150,000 tonnes this year.

“By potentially forming a harvest co-operative, we can achieve greater critical mass and our investors will gain significant financial benefits as a result.”

Forest Enterprises has appointed Jamie Falloon as general manager of business development to lead the investigation into the harvest co-operative.

Dr Smith said: "This innovative agreement perfectly illustrates the benefits of the Government’s emissions trading scheme and its support for the Lake Taupo Protection Trust. It also demonstrates the importance of the relationship between the Crown & Maori on afforestation.

"The emissions trading scheme provides the financial incentives for landowners to improve the environment by planting trees and reducing nitrate pollution.

"The parties in this afforestation project have made it plain it would not be occurring if the Government had not settled the emissions trading scheme last year. This complex scheme encourages those that burn fossil fuels to contribute to forest planting.”

Dr Smith said more than 65,000ha of forest had been lost over the last 5 years “due to uncertainty & perverse incentives under the previous government to deforest. A key objective of the emissions trading scheme is to boost forest planting and this deal in Taupo – so soon after the legislation was passed – is a clear sign that is happening.”

When the survey was done last year, the amount of planned deforestation over the Kyoto Protocol’s first commitment period (2008-12) was expected to be around 50,000ha. That’s dropped to 12,000ha over the same period in this latest survey.

Mr Anderton said that meant a reduction in greenhouse gas emissions from around 40 million tonnes to around 10 million tonnes of CO2-equivalent over the Kyoto Protocol period. “That’s a saving in emission liabilities of $760 million for the New Zealand economy, assuming a carbon price of $25/tonne CO2.”

The survey also showed that a number of landowners had taken advantage of the transitional period before 2008, when deforestation could be undertaken without liabilities under the Kyoto Protocol. In the 2006 survey, expected deforestation for 2007 was 13,000ha. However, actual deforestation was 19,000ha.

Mr Anderton said the Government recognised that placing controls on greenhouse gas emissions from deforestation would affect some forest owners’ land values: “That is why the Government clearly signalled such controls in 2002, providing the industry a 6-year transitional period. The Government is also working with stakeholders on the best way to allocate an additional adjustment package worth some $825 million.”

Pre-1990-forest lobby group the Flexible Land Use Alliance said today there was now overwhelming parliamentary support for a forestry offset scheme.

The National Party said it would pursue an offset scheme through the parliamentary process. Alliance spokesman Ross Green said that meant the measure had a majority on both the finance & expenditure select committee and in Parliament as a whole.

Under a forestry offset scheme, landowners would be able to avoid the proposed deforestation liability of up to $65,000/ha either by replanting the exact same land – as allowed under the Government’s current proposals – or by planting an equivalent area elsewhere in New Zealand that is not currently in forestry.

Mr Green said the introduction of such a scheme would significantly reduce the amount the Government would otherwise have to meet if it were to provide full compensation for the loss of land value caused by the inclusion of pre-1990 forests in the emissions trading scheme, estimated to be in the vicinity of $4 billion.

National’s climate change spokesman, Nick Smith, told the new Carbon News website the alliance had put up a good case for offsetting and that National would pursue it when the select committee & Parliament consider the Climate Change (Emissions Trading & Renewable Preference) Bill.

However, Mr Green was disappointed that National would no longer support the exclusion of pre-1990 forestry from the emissions trading scheme.

“This is a 180-degree U-turn in National’s policy position. Last year, National campaigned strongly against the then $13,000/ha deforestation tax for pre-1990 forests, now estimated to be up to $65,000/ha, and its Bluegreen vision document was absolutely clear that there should be no deforestation cap on pre-1990 forests.

“It seems National was opposed to a $13,000/ha deforestation tax & the inequitable deforestation cap, but that they are comfortable with a deforestation liability of up to $65,000/ha. This is illogical.”

The Flexible Land Use Alliance consists of Blakely Pacific Ltd, Carter Holt Harvey Ltd, Fonterra Co-operative Group Ltd, Forest Enterprises Ltd, Landcorp Farming Ltd, the Forest Owners Association, PF Olsen Ltd & Wairakei Pastoral Ltd. It wants an offset scheme as part of a full compensation package for pre-1990 forest owners if it is decided that pre-1990 forests will be included in the emissions trading scheme.

The Ministry of Agriculture & Forestry has added meetings in Auckland & Wellington to its consultation on sustainable land management & climate change because of the response so far.

Ministry spokesman Mike Jebson said today there was considerable interest in the options, in particular for managing deforestation & changes to land use from forestry. Also up for discussion are options to help land managers adapt to climate change, reduce their greenhouse gas emissions & increase forest sinks, make the most of business opportunities from climate change and work together with the Government & local government to manage climate change & its implications.

The Commerce Commission has cleared CRBF Ltd to acquire the shares &/or assets of a number of Carter Holt Harvey Ltd subsidiaries that hold forestry assets. The clearance is subject to a divestment undertaking.

The Commission gave Hancock Natural Resource Group Inc or a nominee the same clearance a week ago.

Commission chairman Paula Rebstock said the commission was satisfied the proposed acquisition by CRBF would not have, or would not be likely to have, the effect of substantially lessening competition in any of the relevant markets.

CRBF is a newly created timber investment fund managed by the US timber investment organisation, Global Forest Partners, which advises 4 investment funds in New Zealand.

Those funds own forestry assets in the central North Island, a 50% share of a joint venture with Carter Holt in the Mangakahia Forest in Northland, and a 49% share of a joint venture with Weyerhaeuser Co in 63,000ha of forest in Nelson.

The Commerce Commission has cleared Hancock Natural Resource Group Inc or a nominee to acquire the shares &/or assets of a number of Carter Holt Harvey Ltd subsidiaries that hold forestry assets.

Commission chairman Paula Rebstock said the commission was satisfied the proposed acquisition would not have, or would not be likely to have, the effect of substantially lessening competition in any of the relevant markets.

The forestry assets include freehold property, non-freehold land interests, standing timber on that land, plant & equipment, business contracts, licences & consents. The forests & other assets are in Northland, Auckland, the central North Island, Hawke’s Bay & Nelson.

Hancock is a timberland investment management organisation that develops & manages international timberland portfolios on behalf of investment groups. In New Zealand, it manages the production of pruned sawlogs, unpruned sawlogs & pulplogs, mostly in the central North Island.

Another US timber investment fund, CRBF, and its advisor, Global Forest Partners LP, have also sought Commerce Commission clearance to buy the Carter Holt assets.

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